Industrial Revival

Nepal’s manufacturing has witnessed slow growth for decades. Its contribution to Gross Domestic Product (GDP) stands at a meagre 4 per cent to 5 per cent. The entire industrial sector accounts for around 12 per cent of GDP. Several factors have been attributed to the lackluster performance of the manufacturing sector. One is the imported raw materials for which a good amount is spent. This automatically increases production costs. Besides, political instability, inadequate foreign direct investment, lack of technology adoption, policy inconsistency and trade unionism also led to the industrial decline. Low capital spending, high transportation costs, sluggish reform process, weak infrastructure networks and financial institutions’ preference for non-productive sectors also affected industrial progress.